Victorian Government
Purchasing Board
Governance policy
Version 1 (February 2013)
Secretariat
Victorian Government Purchasing Board
Department of Treasury and Finance
Level 6, 1 Macarthur Street
Melbourne Victoria 3000
Australia
Telephone: +61 3 9651 1699
Facsimile: +61 3 9651 5951
procurement.vic.gov.au
Supply policies are made by the Victorian Government Purchasing Board (VGPB) pursuant to s54L
of the Financial Management Act 1994. They have legislative force and must be complied with.
This new supply policy only applies to departments approved for transition by the VGPB. The
current supply policy framework will run concurrently with new supply policies until all
departments have transitioned to the new supply policy framework.
© State of Victoria 2014
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re-use the work under that licence, on the condition that you credit the State of Victoria as
author. The licence does not apply to any images, photographs or branding, including the
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Finance logo.
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Context
This policy outlines the requirements for setting up and managing a procurement governance
framework. It is mandatory for all Victorian Government departments and any public bodies
(hereafter referred to as ‘organisations’) that are subject to the supply policies of the Victorian
Government Purchasing Board (VGPB).
The Governance policy covers three components.
1. Procurement governance framework
A procurement governance framework establishes processes, authorities, accountabilities and
relationships for the organisation to manage an efficient and effective procurement function. It
operates at two levels:
a) the structure, processes and roles that drive organisational performance, improve
procurement practice, reduce risk and promote value for money; and
b) ensuring compliance with VGPB supply policies.
A procurement governance framework ensures that:
 the accountable officer has developed a strategy, systems, policy, practices and processes to
monitor and benchmark performance;
 the accountable officer is asking appropriate and regular questions about procurement
activity and procurement outcomes;
 roles, responsibilities, authorities and accountabilities are clearly articulated and understood;
 risks are identified, mitigated and/or improved; and
 complaints are treated fairly and in a timely manner.
2. Assessment to manage procurement activity
An assessment to manage procurement activity informs the accountable officer that the
organisation has the appropriate governance structure, policies, procedures, practices and
probity in place to manage the scope and complexity of its procurement activities.
It reassures suppliers that the organisation will apply appropriate standards of probity and
process when engaging the market.
3. Complaints management: Managing complaints from suppliers
A complaint is an issue or concern expressed by a supplier in relation to the process and probity
applied by an organisation when carrying out a procurement activity.
For further information and advice on applying VGPB policies including guides, tools and
templates, visit the Procurement Victoria website at www.procurement.vic.gov.au.
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Governance policy, Version 1 (February 2013)
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1.
Procurement governance framework
Governance can be defined as the processes by which an organisation (through the AO) holds
itself to account for defensible and justifiable procurement decisions and processes. Governance
embodies demonstration of leadership, accountability and responsibility.
1.1
Mandatory requirements
The AO is responsible for establishing the governance framework and is accountable for its
implementation. The AO must set up the governance framework before starting any
organisational procurement activity.
1.1.1 Roles and responsibilities
The AO must ensure that the governance framework identifies the roles and responsibilities,
processes and performance standards to ensure compliance with VGPB supply policies.
The role of the chief procurement officer
The accountable officer must establish the chief procurement officer role. The chief procurement
officer role encompasses:
 providing expert advice and guidance to the AO on matters related to the governance
framework;
 overseeing the development, application and ongoing assessment of the governance
framework; and
 ensuring that the complaints management process demonstrates due process and integrity.
A person assigned to the chief procurement officer role:
 must hold a qualification in procurement or hold qualifications with a definable procurement
component; and/or
 must have experience and expertise in managing a procurement function that matches the
organisation’s procurement profile.
Note: In relation to public bodies, an AO may choose not to establish the role of CPO depending on the
complexity of procurement activity conducted by the organisation. The AO must be satisfied that
governance structures and reporting requirements are in place to conduct the organisation’s procurement
activity and to maintain compliance with VGPB supply policies.
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The role of the internal procurement unit
The AO must set up an internal procurement unit. The role of the internal procurement unit is to:
 ensure that all procurement activity applies strategies, policies, procedures, practices and
probity that comply with VGPB supply policies and any other requirements in the Financial
Management Act 1994 or imposed by the accountable officer;
 assess the procurement capability of the organisation on an annual basis;
 manage the preparation of a capability development plan;
 identify major procurement categories;
 review its own performance and capability at regular intervals; and
 report annually to the accountable officer on the organisation’s procurement activities.
Note: In relation to a public body, an accountable officer may choose not to establish an internal
procurement unit if satisfied that governance structures and reporting requirements are in place to
conduct the organisation’s procurement activities and to maintain compliance with VGPB supply policies.
The accountable officer will:
 determine the terms of reference and operational arrangements of the IPU; and
 ensure that the expertise and experience of IPU staff are appropriate for the scope, nature
and complexity of the procurement activity carried out by the organisation.
1.2
Developing a procurement strategy
The governance framework is underpinned by a procurement strategy. This strategy provides an
overview of the organisation’s procurement profile and includes the following components:
 procurement activity plan;
 contract management planning strategy;
 supplier engagement plan; and
 capability development plan.
Note: Requirements for developing these four components are detailed in respective guides,
available at the Procurement Victoria website at www.procurement.vic.gov.au
The AO must ensure that the procurement strategy is reviewed annually to confirm alignment
with the procurement profile of the organisation and broader government objectives.
The VGPB can request a review of the procurement strategy and component parts at any time.
1.2.1 Procurement activity plan
The procurement activity plan details planned procurement activity for at least the next 12 to 24
month period. The procurement activity plan must be reviewed at least annually to keep the
market informed of changes or developments. A high-level summary plan must be published on
the organisation’s website to improve transparency for suppliers.
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2.
Assessment to manage procurement activity
Assessments are measured against a series of standards set out in an assessment tool developed
by the VGPB.
2.1
Mandatory requirements
To operate in the VGPB’s new procurement setting, an organisation must:
 make a submission and presentation to the VGPB using the assessment tool to demonstrate
that their organisation is fully capable of managing their own procurement activities; and
 have the submission supported by the relevant accountable officer.
The VGPB can require the accountable officer to:
 submit to further assessment reviews when requested to assure the VGPB that the
organisation is complying with supply policies and performance commitments;
 submit specific procurement activities to the VGPB for process and probity oversight;
 report on any recommendations made by the VGPB;
 submit documentation in a form required by the VGPB; and
 adopt processes and procedures as determined by the VGPB.
The VGPB can require the accountable officer to audit any aspect of their procurement activity or
practices and to report back as directed by the VGPB.
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3.
Complaints management
A complaint is an issue or concern expressed by a supplier in relation to the process and probity
applied by an organisation when carrying out a procurement activity. The complaint should be a
letter, email or fax lodged with an organisation’s accountable officer or chief procurement
officer.
3.1
Mandatory requirements
The organisation must develop a complaints management system that sets out the process and
procedures for addressing complaints.
The investigation of a complaint and subsequent response must be overseen by a person not
involved in the subject matter of the complaint. An organisation’s complaints management
system must be accessible to a complainant.
The complaints management system must outline:
 how the investigation will be dealt with;
 what documentation the organisation requires from the complainant in terms of scope and
format;
 contact and lodgement details for all documents;
 timelines for conducting the investigation and providing a response;
 the range of outcomes available to the organisation in responding to a complaint;
 the process for a review by the VGPB, should the findings and actions taken by the
organisation not resolve the matter to the satisfaction of the complainant; and
 other government bodies that may be able to assist.
The organisation is to inform the VGPB within five working days of any complaint that could not
be resolved to the satisfaction of both parties.
The organisation must disclose in its annual report the following information in relation to each
complaint received:
 the procurement activity to which the complaint relates; and
 the status of the complaint confirming whether it:
– was resolved;
– is still under investigation; or
– could not be resolved.
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3.1.1 Referring a complaint to the VGPB for review
A complainant can refer a complaint to the VGPB for review if not satisfied with the findings and
actions of the organisation involved. This could be related to the management of the complaint
or the application of supply policies.
Complaints submitted to the VGPB must be lodged by letter, email or fax within 10 working days
of the receipt of the findings by the organisation to:
The Chair
Victorian Government Purchasing Board
Department of Treasury and Finance
GPO Box 4379
MELBOURNE VIC 3001
The complainant must provide the following material:
 evidence that the organisation did not correctly apply supply policies in relation to a
procurement activity;
 evidence that the organisation’s complaints management procedures were not applied
correctly;
 a copy of all relevant correspondence between the complainant and the organisation in
relation to the nature of the complaint; and
 any additional material requested by the VGPB to assist it in its findings.
The VGPB:
 will inform the organisation and complainant of its findings and any further action it intends to
take in relation to the matter;
 can require the accountable officer to audit its application of supply policies in relation to the
procurement activity;
 can inform the Assistant Treasurer of its review of a complaint and advise the Minister of
further action that could be taken; and
 note the outcome of a review in relation to any complaint in its annual report to Parliament.
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